Trucking Insurance Basics for Owner Operator Starting a Business - Strong Tie Insurance Services

Trucking Insurance Basics for Owner Operator Starting a Business

Strong Tie Insurance March 14, 2022 Our Blog

To become an owner-operator, you’ll need a lot of confidence and a little bit of know-how.

For drivers with an autonomous mindset, ditching the fleet life for a sweet life on your own might be liberating. However, traveling the freight landscape alone presents its own set of difficulties. Indeed, being in charge of your own business can be overwhelming for individuals who are unsure where to begin, particularly when it comes to commercial trucking insurance.

As an owner-operator, one of the first things you should consider is commercial vehicle insurance. Insurance is not only required, but it will also assist protect you and your company if something goes wrong.

It’s also a crucial step in obtaining your own trucker license. Pre-approval for cargo and liability insurance is one of the first things you should do. Before you spend much time on any other planning, be sure you qualify for insurance and that your rates will be affordable and reasonable enough to provide room for a profit.

What Owner Need to Know About Commercial Trucking Insurance?

There are a variety of reasons why you need insurance, as well as a variety of factors that influence the cost of owner-operator insurance. In addition, the price of coverages differs by location and the cheapest state for commercial truck insurance can be found in Mississippi.

In commercial vehicle insurance coverage, there are a few other things to check for.

Why Do Owner-Operators Need Truck Insurance?

Having owner-operator truck insurance is a must. It is mandatory in obtaining your truck authority and operating your business—which is an essential factor in your business. While insurance must be included in your budget, this does not imply you should overpay for it or carry coverage you do not require.

There are three types of insurance that are required:

General Commercial Liability Insurance

General business liability insurance protects you from being sued and covers certain damages. If a vendor, for example, gets on a forklift to assist you with unloading and destroys a trailer, insurance should reimburse you.

What if you inadvertently utilize the logo of another company, and that company sues you?

Personal and advertising injury liability would cover this.

Standard Automotive Liability

You’ll also need ordinary motor liability insurance to protect against bodily injury and property damage in the event of an accident. You’ll need collision and comprehensive coverage comparable to what you have on your automobile if you’re financing your truck or trucks.

Cargo Insurance

To cover the things or cargo you’re transporting, you’ll also need cargo insurance.  The cost is determined by the type of cargo and whether it is being transported intrastate or interstate. These plans usually have restrictions, so make sure you have enough coverage for the loads you haul.

Factors that Affect Your Owner-Operator Insurance Premiums

There are two factors that may affect your owner-operator insurance premiums, things you can control and things you can’t.

Controllable Things

You have complete control over your professional activities and equipment. To secure your company, keep track of the following:

  • Your credit rating. Your insurance plans and pricing are influenced by your personal credit score. Make sure all of your invoices and debts are paid on schedule.
  • Your SAFER rating. The FMCSA Safety and Fitness Electronic Records (SAFER) system provides industry and public access to company safety data. Your insurance costs will be influenced by your overall score.
  • Safety features and equipment, Choose your equipment carefully, preserve complete maintenance records, and if possible, choose the finest safety features.
  • As part of your continuous education, including safety precautions and training. The safety precautions you take and the training you give for yourself and any drivers you employ can help you save money on insurance.

One at-fault collision can cause your insurance prices to spike and your SAFER score to plummet, making it difficult to earn a profit.  Keep your business organized, and be informed of industry changes and how they may affect you.

Uncontrollable Things

Every owner-operator and motor carrier company you deal with is affected by certain market dynamics. These factors, despite having a direct impact on your bottom line, are mostly beyond your control:

  • Nuclear settlements, like insurance premiums, are rising as a result of large court settlements against trucking businesses in accident instances. The number of lawsuit verdicts is increasing. In 2012, they were around $2.6 million on average in the Southeast, but by 2017 they had risen to $17 million on average. As a result, insurance firms are forced to hike prices in order to remain profitable.
  • California’s AB-5 is redefining the definition of employee, which determines who must carry liability and cargo insurance and when. This has a significant influence on independent contractors and owner-operators that work in the logistics industry’s last-mile segment.

Nuclear settlements may become the norm in the absence of serious reform, resulting in higher insurance costs.

Essential Things to Look for in Trucking Insurance Coverage

Know what you need and want in commercial truck insurance before speaking with an insurance representative. Meeting with agents who specialize in the trucking business and owner-operator insurance needs is also crucial.

Here are some things to keep an eye out for:


Your premium is the amount you will pay for insurance on a monthly basis. Some businesses will give you a discount if you pay in three, six, or twelve-month increments. It’s crucial to know what the premium entails, how often and when you’ll be paid, and what savings you might be qualified for.


The deductible has a significant impact on insurance premiums. The deductible is the amount you must pay out of pocket before your insurance coverage kicks in. If you choose coverage with a high deductible, be sure you have enough money in your account to cover the deductible.

For example, if your general liability coverage has a $5,000 deductible, your premiums will be significantly lower than a policy with a $1,000 deductible. If you file a claim, however, you will be liable for the first $5,000 until your insurance kicks in.

Choose the Right Trucking Insurance for your Business

Knowing where to grab the best deal on the cheapest state for commercial truck insurance is crucial to your business, especially when you’re still in the planning stage of starting a venture in the trucking industry.

You may keep your insurance coverage costs under control by knowing what you require, maintaining a clean driving record, a low SAFER score, and good credit. You may speak with our team to get a quote, contact us at Strong Tie Insurance today!